Senate backtracks on corporate money ban

The Vermont Senate has reversed its decision to prohibit corporate campaign donations. The majority of Democratic senators flip-flopped on the issue Thursday after approving a ban on corporate contributions in two previous votes.

Sen. Alice Nitka, D-Windsor, presented a strike-all amendment to the campaign finance reform bill on Thursday that eliminated the prohbition on corporate contributions. The proposal was not presented to the Government Operations Committee; nor did it appear in the Senate calendar. Senators saw it for the first time when they entered the chamber that day.

Backers of the ban said the change brings Vermont in line with federal law, which has been in place since 1907.

Critics of the so-called “Galbraith amendment” after Sen. Peter Galbraith, D-Windham, the ban’s most vocal supporter, countered that the ban burdens small businesses, decreases political transparency, and implicitly assumes that Vermont politicians are corrupt.

Senators voted 19-11 to eliminate the ban on corporate money in what some called a “gut and study” proposal that calls for the Secretary of State to issue a report on the matter in December.

This latest vote reverses two previous Senate decisions. Last Friday, senators approved the ban in a 24-3-3 vote. On March 28, the prohibition was supported in a 21-8 decision.

Twelve senators — most of whom are Democrats — backtracked on the issue.

Senate President Pro Tem John Campbell, who opposes the ban, said that there hadn’t been any discussion at the Democratic caucus about the ban’s overturn and there was no attempt to strongarm votes.

Individual senators merely realized in the last week they were concerns with the ban, he said, which in essence limits the amount of money a candidate can accept from an individual and his or her corporate entities.

Under current law, and under the new bill passed by the Senate, a candidate can accept contributions from an individual donor and any number of his or her corporations. In 2010, for example, David Blittersdorf, a successful entrepreneur gave Gov. Peter Shumlin $8,000, through four different corporate entities.

The ban would have permitted contributions from individuals or political action committees. Under the corporate giving prohibition, corporations that wished to form political action committees could only aggregate donations from employees.

Several senators said the corporate ban would discourage average Vermonters from running for political office and would give an unfair advantage to independently wealthy residents of the state.

On Wednesday, three Democrats stood on the Senate floor to complain they didn’t understand what they had voted for in the two previous decisions. They professed not to comprehend what a ban on corporate donations really meant.

That turn of events led to a divisive floor debate on Thursday in which Sen. Phil Baruth, D-Chittenden, the Democratic majority leader, bucked the Senate leadership and gave a speech castigating the members of his caucus for reversing their stance on the issue and openly questioning their motives for accepting corporate contributions.

Numerous recesses, impromptu votes by the Government Operations Committee on the Senate floor (since they hadn’t previously seen the amendment, much less approved it) and bravado speeches in the how-dare-anyone-question-our-integrity vein ensued. Several senators said they were insulted by the insinuation that Vermont elections are less than squeaky clean.

Nitka, who introduced her amendment with little fanfare, told her colleagues on the Senate floor that her proposal aimed to “continue to allow small local businesses to contribute to candidates of their choice, without having to become a PAC [political action committee].”

She said there was “confusion” about the consequences of what the Senate had approved earlier, and about who exactly could donate under a corporate ban. She also contended that her amendment ensures that Vermonters of all incomes can run for political office, not just the wealthy.

But Sen. David Zuckerman, P-Chittenden, who backs the ban, said the turnaround came down to personality and politics, not policy. Galbraith raised a few technical amendments on the Senate floor on Wednesday, opening a Pandora’s box and reigniting debate on the ban.

On the Senate floor, Zuckerman defended the ban and said it would not burden small businesses.

“It’s really about saying large corporations, which primarily donate large quantities – $1,000, $2,000, $3,000 contributions, often to try to have political influence in the system – are not able to dig into their corporate coffers to make those contributions,” said Zuckerman.

“By passing this [Nitka] amendment, we would be reversing that decision that we made, which was to say: deep-pocketed corporations cannot give unlimited dollars from their corporate coffers,” he continued.

Previously, Zuckerman had questioned the sincerity of senators who voted for the ban, when it looked like the bill itself would die, as Seven Days reported. http://www.7dvt.com/2013no-laughing-matter-vermont-senate-jokes-campaign-finance-reform.

In one tense moment on the Senate floor, Democratic majority leader Phil Baruth, D-Chittenden, rose for a brief speech on the merits of the ban, but was interrupted by Campbell for a quick recess.

During a Senate floor huddle, Baruth insisted that he would finish his speech. “I literally don’t care what others think. I’m going to finish this,” he said.

Baruth was chided for broaching legislative etiquette, which forbids senators from questioning the motives of other lawmakers. Sen. Peg Flory, R-Rutland, called him out on the matter.

Baruth went on to finish his speech. He described the first vote on the corporate money amendment as his proudest political moment of the year, and close to the proudest moment he’s ever had in the Senate. Not only did they overhaul campaign finance rules, Baruth said, but “we did so by limiting corporate money, which I believe does influence people in Vermont. And I do believe it has an influence beyond the proper.”

A number of senators in responses on the floor said they were offended by the implication that Vermont lawmakers are influenced by campaign donors. Senators reiterated that political corruption might exist in Washington, D.C., or in other states, but not in Montpelier.

Baruth also objected to the way the debate on Thursday began.

He said Nitka’s amendment had been presented “in the most confusing procedural manner possible. It was not run through the [Senate Government Operations] committee; it was not voted on by the committee; and we could not read it until we got it into the Chamber.”

“I find all of those things taken together to be troubling,” said Baruth. Sen. Jeanette White, D-Windham, Government Operations chair, confirmed they hadn’t taken an official vote, though they took one eventually on the floor, voting 4-1 to remove the ban.

After the vote, Campbell dismissed any question of political tension between himself and Baruth, his second-in-command. He said other senators had simply taken Baruth’s remarks personally and that’s why he called a recess.

Asked about the message this final vote sends to the public, Campbell said the vote communicates that “this is a complicated issue.”

“Again, I still say, show me where the problem was to begin with,” Campbell said. “I don’t, I really don’t believe, that there was any case ever made that there was influence in our elections.”

Paul Burns, who leads the nonpartisan advocacy group VPIRG, said: “I just don’t buy the argument that this is ultimately a very confusing concept.”

“Confusion is not a legitimate reason to vote against this bill,” he continued. “Confusion can be cleared up in a matter of minutes, for any question, it seems to me, that could be raised about the bill.”

“So I think it really will come down to a policy question: do you believe that corporations should be able to give out of their general treasuries? Today a majority said: Yes.”

Burns, who plans to gauge interest among House lawmakers for a revival of the ban, concluded: “I think that it’s an issue that will be revisited in the future. And it could go another way then.”

Nat Rudarakanchana is a recent graduate of New York’s Columbia University Graduate School of Journalism, where he specialized in politics and investigative reporting. He graduated from Cambridge University with a B. Read more

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Wally Roberts

3 years 7 months ago

As someone who followed this issue closely last year and testified in favor of the ban in Gov. Ops., I would like to add that I never heard anyone imply that there is hard evidence that corporate contribution influence Vermont elections. But the whole point of the ban is to make it very difficult for that to happen. And clearly, some senators’ campaigns, like those of Campbell and Cummings are heavily dependent on large corporate contributions, which to me implies they are too lazy (or afraid?)to try to raise money from voters. Sens. Baruth, Zuckerman, Pollina and Galbraith are to… Read more »

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Mike Kerin

3 years 7 months ago

I think it is a mistake to backtrack on this. Corporations should not be able to influence our elected officials.

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Ron Pulcer

3 years 7 months ago

Kudos to Sen. Phillip Baruth, Sen. David Zuckerman and Sen. Peter Galbraith. As to Sen. Peg Flory “calling out” Sen. Baruth on his “legislative etiquette”, if Sen. Baruth cannot question his colleagues, then at least the citizens can. I checked the Vermont Secretary of State website for Campaign Finance reports. I checked all of the related 2012 pages for links to Sen. Flory’s campaign report(s). Did the VT. Secretary of State’s office fail to post links to Sen. Flory’s campaign reports? Or, did she not submit reports to the Secretary of State’s office? Or, did she run on her own… Read more »

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Ron Pulcer

3 years 7 months ago

I did find a 2011 campaign report for Sen. Peg Flory, but nothing for 2012.

The politicians can “carry-forward” surpluses from prior campaigns to future campaigns ($518.14 for Sen. Flory). Whereas we taxpayers must declare interest and dividends on Federal Schedule B (added to AGI on Form 1040), I wonder if the politicians pay any tax on interest generated by the money sitting in their “campaign bank accounts”. I would guess the answer is probably “NO”!

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Walter Carpenter

3 years 7 months ago

Ron:

Thanks much for your research here. This needs more watching.

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John Lawrence

3 years 7 months ago

Why do we keep electing the same people to office term after term and then pass laws to stop these same elected bozos from selling us down the road for a few thousand dollars from a corporation? Wouldn’t it be smarter to just vote them out of office?

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S Ivy

3 years 7 months ago

This excellent piece of journalism should be the foremost piece of campaign literature in the next election. The concept that corporations, which are created under state law for the sole purpose of conducting business to make profits, would spend money on politicians for some reason other than to enhance their profits is the most naive self deception. Influence peddling is distinguished from outright bribery on the very grounds that it is not the result of an outright quid pro quo agreement. The Democrats who decided to protect their business plan by authorizing corurpt practices that were banned at the federal… Read more »

Seeing how VSA 1 sec. 128 defines a corporation (and a lot of other things) as a person, I don’t see how a ban on corporate campaign contributions could be upheld in the courts.

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Paula Schramm

3 years 7 months ago

I am in favor of this ban, and am disappointed by the Senators who flip-flopped., including both my senators Don Collins and Norm McAllister. If there was confusion, why was there no warning ahead, or time for adequate new discussion about it, and no proper time for the Gov. Ops Comm. to take a look at this new amendment that changed the bill so drastically ? Seems like quite a bit of law-making on the spur-of-the-moment in this session’s Senate. I’m also upset about superPACs in Vermont. I found an expensive, color 3-fold flyer in my mailbox today from the… Read more »

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Walter Carpenter

3 years 7 months ago

Paula:

Good call on calling out Vermonters First.

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